Correlation Between CTR Investments and KAT Exploration
Can any of the company-specific risk be diversified away by investing in both CTR Investments and KAT Exploration at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CTR Investments and KAT Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTR Investments Consulting and KAT Exploration, you can compare the effects of market volatilities on CTR Investments and KAT Exploration and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CTR Investments with a short position of KAT Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTR Investments and KAT Exploration.
Diversification Opportunities for CTR Investments and KAT Exploration
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CTR and KAT is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CTR Investments Consulting and KAT Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAT Exploration and CTR Investments is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CTR Investments Consulting are associated (or correlated) with KAT Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAT Exploration has no effect on the direction of CTR Investments i.e., CTR Investments and KAT Exploration go up and down completely randomly.
Pair Corralation between CTR Investments and KAT Exploration
Given the investment horizon of 90 days CTR Investments Consulting is not expected to generate positive returns. Moreover, CTR Investments is 2.23 times more volatile than KAT Exploration. It trades away all of its potential returns to assume current level of volatility. KAT Exploration is currently generating about 0.04 per unit of risk. If you would invest 0.04 in KAT Exploration on December 5, 2024 and sell it today you would earn a total of 0.00 from holding KAT Exploration or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
CTR Investments Consulting vs. KAT Exploration
Performance |
Timeline |
CTR Investments Cons |
KAT Exploration |
CTR Investments and KAT Exploration Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CTR Investments and KAT Exploration
The main advantage of trading using opposite CTR Investments and KAT Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTR Investments position performs unexpectedly, KAT Exploration can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KAT Exploration will offset losses from the drop in KAT Exploration's long position.CTR Investments vs. American Leisure Holdings | CTR Investments vs. Absolute Health and | CTR Investments vs. Supurva Healthcare Group | CTR Investments vs. Alpha Wastewater |
KAT Exploration vs. Southern ITS International | KAT Exploration vs. UHF Logistics Group | KAT Exploration vs. Intl Star | KAT Exploration vs. Church Crawford |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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